Hong Kong is well-known now for having the world’s highest property prices.
What is less well known are the massive surpluses the government has built up.
As the most of the world begins to drown in debt,Hong Kong’s surpluses are near
spinning out of control to the point of embarrassment.
Hong Kong is now promising to reduce its tax rate from the current 16.5 per cent
to below 10 per cent for all businesses.Unlike the U.S.,however, Hong Kong does not
even need to consider cutting on the expenditure side. The city-states fiscal
surplus is now so large the government doesn’t know what to do with all the money.
Hong Kong now as a surplus running at HK$185 billion a year as of the latest figures.
That is the equivalent of 7.1 per cent of gross domestic product. It comes to
HK$72,800 ($9,454) for every household in Hong Kong.
These surpluses are annual surpluses,the total government surplus is now so large
the government now tries to keep the number hidden. Officially, the figures given
by the Hong Kong Monetary Authority report show direct government deposits of
HK$ 1 trillion. These numbers do not include the savings of statutory bodies in the
government which when included takes the Hong Kong governments savings up to
HK1.98 trillion which is equivalent to 77% of GDP.
In Hong Kong,the city-state has a comprehensive social security system, with roughly
50% of apartments in the city being public and given at low or no rent to citizens.
The city-state has full medical care at only small charge to the user and one of the
world’s best and cheapest public transport systems. These are just the start of the
benefits to Hong Kong citizens.
The government in fact no longer even needs to collect personal income taxes.
What can the Hong Kong teach the rest of the world? Good governance, including low
taxes, free markets, a pegged currency to the Dollar,and good fiscal management.
Hong Kong’s riches now boggle the mind.